The art of negotiating is essential to business. But negotiating
isn't always easy, and what you say and do in
the context of a negotiation can have significant commercial and
In BBB Constructions Pty Ltd v Aldi Foods Pty Ltd1, BBB alleged that Aldi acted in a way that was
misleading or deceptive, or
unconscionable and that Aldi was
estopped from denying that it had agreed to lease
the premises "on terms as finally agreed".
Aldi in turn denied that it was liable to BBB in any of those
ways. It contended that the parties negotiated on the express basis
that neither would be liable unless and until an
agreement for lease, setting out all the terms of their
bargain, was executed and exchanged; and that any
commitment of Aldi was subject to board approval, which approval
was never forthcoming.
Ultimately the court found that Aldi was not liable.
When you're in business, what you say and do in the context
of negotiations is critical. You need to be very clear in your
negotiations, remembering that silence can be misleading or
What can you do?
There are things that you can do to help protect your position
and your company during negotiations, particularly protracted
Keep notes of all meeting and discussions of
Never disclose an approval or make a statement
of approval unless it's provided formally;
Know the other party's position at all
times – if it changes and they don't disclosure it could
be to their detriment;
If you're going to act on reliance of the other party's
representations, documentthat and keep the other
and side informed; and
As soon as possible ask Thynne & Macartney to prepare a
binding heads of agreement or
term-sheet to record the positions of each
Thynne & Macartney's Business Advisory team can help you
in each stage of the negotiations, whether it's the heads of
agreement, term sheet or agreement for lease, or developing
commercial strategies to help you get the best outcome.
1BBB Constructions Pty Ltd v Aldi Foods
Pty Ltd  NSWCA 224
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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